While the signals have been correctly giving the green light for investors, a plethora of longer-term concerns, including commercial real estate, rising debt burdens and unsustainable consumer spending, still remain. We could see both short-term and intermediate-term signals flipping to risk-off in the early part of March and that’s when we really need to start paying attention to risk management.

The market is proving to be not so invincible after all and inflation is still its kryptonite. I don’t think we can write off the possibility that the Fed could have another hike left in them. In my opinion, the U.S. equity market is still a small-cap story. I would expect to see the first rate cut in Europe sometime in the first half, probably before the Fed decides to move. I suspect the Bank of Japan is readying itself to get involved on the yen.

The U.S. equity markets have been driven by a narrow set of stocks for more than a year now, but market leadership today is getting downright razor-thin. If you’re paying attention only to GDP growth and non-farm payrolls, you’re missing a lot of the big picture. Powell said in December that the central bank was forecasting three rate cuts this year, but it’s looking like even that might be optimistic.